CAREER: Improved Service Through Improved Logistics

University Of Iowa, Iowa City IA

Investigators

Abstract

This Faculty Early Career Development (CAREER) Program award presents research and education goals for three themes in the area of logistics being used in a variety of ways to improve customer service, for example by making it more reliable, convenient, or faster, while at the same time creating higher profits for the vendors. These three themes are: 1) Reliable service through vendor managed inventory. Under a vendor managed inventory policy (VMI), a consumer allows a vendor to set the timing and quantity of deliveries in exchange for more reliable service. The research focuses on improving solution methodologies in terms of efficiency and quality and extending solution methodologies to include practical complexities, such as customers being served from multiple depots. These efforts involve creating new decomposition schemes and using mixed-integer programming and vehicle routing heuristics to solve the resulting subproblems; 2) Consumer direct through dynamic routing and pricing. Providing the convenience of goods delivered to the front door often comes at a high price. The research focuses on creating technology for order delivery based on dynamic routing and scheduling algorithms and using incentives to influence customer behavior during order capture; and 3) Express delivery through time directed hub location and allocation. Promising faster delivery times is beneficial for customers and can create a competitive advantage. Faster delivery times may be achieved by improved hub location and allocation choices in hub-and-spoke networks. The research focuses on analyzing the complexity of the embedded optimization problems and algorithm development. These three themes represent interesting and challenging research areas and provide a firm foundation for a career in logistics. VMI requires innovative approaches to handle size and complexity of real-life instances. Consumer direct involves dynamic decision making under uncertainty, an increasingly important issue. Time sensitive hub location and allocation introduces new models with many applications. Material from these themes will be used to create teaching materials for courses at both undergraduate and graduate levels, including a collection of interactive case studies, which will be made publicly available. The activities of this project will impact society by the project's very nature: the improvement of customer service.